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Management Side
Week of 12 December 2022: More Energy Follies

Email Jim at jim.thompson@ipulpmedia.com

I think my long-term proclamation that all energy is political (which is proven true every day in the popular press), licenses me to wander a bit from our normal management and technical topics here as we attempt to figure out how to get the pulp and paper industry through this coming Northern Hemisphere winter.

In the last week, the attempt to coalesce sixty countries into a maximum price to pay for Russian Oil while the rest of the world does essentially whatever they want is laughable. Don't build your operating budget for the next six months on this nonsense. That system will be leakier than the 25-year-old lubrication bowser sitting in your machine basement (now, in what publication other than Paperitalo could you get an analogy like the one I just made?!).

It seems to me mills will have to go after their own fuel sources. Keeping under the radar as far as the general press is concerned, but absolutely within in all legal bounds, pulp and paper companies may need to do their own sourcing of oil and gas. This may be at a distance or closer to home. Some of my ideas may take longer than this winter to implement, but they can be a start down the path.

Older mills within city locations may be able to tap into central district heating systems for dryer steam. Many older cities have such systems; it was where they sent their spent steam from their electrical generating turbines. Today, we call these co-generation facilities when they are purpose built with such a marriage in mind. And some of those have turned out to be disasters, too (in one case here in the United States a mine mouth generation station with a paper mill sitting beside it caused the mill to lose its source of low-pressure steam when the electrical generator shut down). However, you never know what exists until you check it out. Many European cities had these central district heating stations at one point in time, I have no idea how many are left.

You can look beneath your feet. I have told this story many times (probably my pride in the idea showing through) but I once solved the energy problem in a converting plant by having them punch a gas well, literally outside their front door on their own property. They have been enjoying free energy for 16 years (I should have constructed my consulting fee on a percentage of savings!).

Several years ago, Delta Airlines bought their own refinery in eastern Pennsylvania.

Going directly to "mid-stream services" providers such as Genesis Energy (NYSE: GEL) (disclosure, I own stock in GEL) may turn up a side stream which you can use for an energy source.

Feel you are too small to have much clout? Get your lawyers to get together with some other industries (not necessarily pulp and paper) in your geographical area and see if you can form a purchasing and shipping consortium to provide the energy you need.

Your limits on energy sourcing are only limited by your creativity. There are enough "leaks" in the worldwide energy business to fulfill the entire needs of the pulp and paper industry. Go find them.

Be safe and we will talk next week.

________

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